Page 55 - Managing Change in Organizations

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Chapter 3 ■ The transformation perspective

New ‘rules for the organizational game’

To explore this theme let us turn to two case studies.

CASE
STUDY Ford and the Global Car

Under the label ‘Ford 2000’ the company seeks to transform itself into a global corpo-
ration deploying a new ‘philosophy’ of doing business (see Parry-Jones (1996) for more
detail).
By 1993, despite being profitable, the world’s second-largest automotive producer
engaged on a major programme of development. Ford also recognized itself as part of
a complex and intensively competitive sector, not least with issues of oversupply in var-
ious markets. The existing business philosophy emphasized the production of cars in the
regions where they were to be sold. Yet Ford was engaged in separate development
processes in different regions of the world for what were essentially similar products.
Moreover, while Ford was well positioned in the USA and Europe it was less well placed
in those areas where growth in demand is likely.
Moreover, customers are more sophisticated, more demanding and more aware of
what is available around the world. The market is increasingly global. The company has
merged its semi-autonomous regional operations into a single worldwide business.
Product development will focus globally.
Change of this type had been attempted earlier in Ford’s history. The Escort devel-
opment had been shared by teams in Europe and North America but differentiation
resulted. Amalgamations within Europe were achieved in the late 1960s. The Escort
experience led Ford to realize that a world car development needed single leadership to
achieve the needed integration – easy to say but not easy to achieve. The Mondeo
development was a further stage in the process. Led from Europe, this work was facili-
tated by a communications infrastructure allowing the sharing and analysis of data and
decision making across borders. The communications infrastructure supports a world-
wide engineering release system, a worldwide purchasing system and a global confer-
encing facility. Are these infrastructure developments not as important as the concept of

single leadership in enabling the company to overcome the problems of national pride
and narrow perception that limited the past attempts?
In turn the Mondeo development led Ford to learn vital lessons, in particular ‘simul-
taneous engineering’. Achieved via ‘vertically integrated teams’, it contrasts with the
former sequential process with its attendant possibilities for conflict between those who
design and those who manufacture the product. In early 1994 a ‘study team’ of 27
managers from a variety of functions and countries began a 10-week programme look-
ing at how to learn the lessons of the past and achieve genuine globalization. It was
decided to merge the existing operations in Europe and North America. Ford estab-
lished five vehicle centres to take lifetime responsibility for the development of all vehi-
cles of a given class produced and sold anywhere in the world. In addition Ford has
created a single global unit for technology development. All employees with
Automotive Operations have been deployed within this worldwide ‘matrix’. The vehi-
cle centre is responsible for developing and launching new vehicles and has lifetime

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